Asset managers race to create European defense funds

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Asset managers are rushing to the creation of boxes circulating on the stock exchange that focuses on the defense sector in Europe, as it has pushed a modern march for investors to rethink their position on the inclusion of controversial shares in their governorates.

Amuundi, the largest asset manager in Europe, launch a summer of the European ETF associated with defense companies in anticipation of the increase in military spending across the continent, according to two people familiar with the situation. VANECK, a US Fund’s director of $ 114 billion, also explores the launch of a similar investment vehicle.

“They are) faster than I saw.”

Earlier this month, the American company Wisdomtree has included what it said was the first ETF institution to focus only on European defense companies on stock exchanges in Germany, Italy and the United Kingdom. The fund has attracted more than $ 575 million in flows since then and has already become the second largest objective box for the platform in Europe.

“There is very great interest,” said Pierre Dipro, European Research Head at Wisdomtree. “We have retirement boxes that communicate with wealth managers and retailers … we see customers from all over.”

The sudden explosion comes from the investor’s interest in the European defense after the United States cut military support to Ukraine in a sudden axis towards Russia, as many European governments are now planning to increase its local production in seeking to achieve strategic independence.

The Stoxx EUROPE Total Market Aerospace & Defense has increased this year, far exceeding the wider Stoxx EUROPE 600, where investors expect a spending boom.

Gathering A return in favor of a sector is often avoided by the large continent’s investors. The money that invests under an environmental, social framework and the governance of defense companies, such as the Rheinmetall Group and Italian Germany Leonardo, are often excluded from its governor.

But some retirement pension investors are considering alleviating their defensive exceptions, on the pretext that investing in arms manufacturers has become important to defend democracy.

Anders Shield, the chief investment official in the Danish pension fund, said he was completely sure to discuss his defensive policy at the annual general meeting next week. “I will not rule out that the board of directors may reduce our position,” he said, adding that the current exclusion policy was “very strict.”

Ronald Wagster, CEO of APG, which runs 616 billion euros on behalf of four Dutch retirement funds, said it may “be able to do more” to help finance the Dutch and European defense. The largest retirement fund manager in Europe is currently investing about two million euros in companies related to the sector.

“I have never seen such a transformation (for European markets) … we cannot look at the United States as a safe and reliable partner while we see this in where the money has gone in recent weeks,” said Alexander Peter C. Stock analyst at Bernstein.

He added that a long period of weak performance in Europe was approaching “all investors who want to join the party.”

“They have definitely become more softening,” said Tom Belli, headquarters of London-based Hanetf Research, said, “It is definitely softening” when it comes to defense companies in their governorates, “said Tom Billy, Hanetf headquarters, which is based on London-who announced this week’s plans to launch ETF European Defense-Investors.

He said: “Before some find that it is uncomfortable to add any defense company, but attention now rises from everywhere.”

Historically, investors were “very difficult” about making money in the military sector, said Mike Ecins, the chief investment official in Phoenix, the largest retirement and savings provider in the United Kingdom.

But now, he said: “The owners of the long -term assets … they must invest more in defense.”